Twice-bailed-out failed automaker Chrysler is on the receiving end of plenty more corporate welfare these days. Ohio Gov. John Kasich’s Department of Development just announced more than $8.5 million in subsidies to Chrysler, in order to keep manufacturing jobs in the state.
The Toledo Blade reports:
Chrysler announced Tuesday that it will invest $72 million to produce improved torque converters and steering columns for the automaker’s next generation of front and rear-drive automobiles. The investment will pay for the installation of new equipment and special tooling to upgrade the 45-year-old plant.
The investment will not add jobs or bring an expansion to the plant, which is along the Ohio Turnpike. But it will preserve 640 hourly and salaried workers there, the automaker said.
After I wrote about Rick Perry’s economic development funds, calling them corporate welfare, Perry’s rather–umm–spirited defenders told me (among some unprintable things) that all governors have slush funds like this.
That’s basically true. Michael Brendan Dougherty’s piece on Jon Huntsman mentioned that in Utah he loaded up a good tax reform with “tax credits aimed at attracting new business development.”
This raises a good topic that conservatives and libertarians need to discuss. We’d like state competition for business to take the form of low tax rates and low regulatory burden. Instead, states keep their big-government apparatus in place, while governors carve out special deals for favored business.
The main victim, of course, is the small business that can’t get the carveout. But the state’s economy also suffers as wealth is allocated according to political favor.
